Richardson-Vicks Rejects New Bid : Adopts Anti-Takeover Measures to Thwart Unilever Offer
Richardson-Vicks Inc. on Tuesday rejected a sweetened merger offer from the U.S. subsidiary of Unilever and responded with a series of steps designed to thwart the hostile takeover bid.
The moves included the distribution of a new, special preferred stock and “certain actions to ensure the continuity of management, employee job security and protection of employee benefits,” the company said in a statement.
Spokeswoman Deborah Bennetts declined to specify the other measures taken. The moves came in Richardson-Vicks’ latest response to the overtures of Unilever, the largest consumer products manufacturer in the world, which initially had attempted a friendly “business combination.”
The offer is being made by Unilever U.S., a unit of Unilever NV of Rotterdam, the Netherlands, which is the Dutch half of the Unilever conglomerate.
On Monday, Unilever raised its earlier bid for Richardson-Vicks to $56 per share from $54 and launched a hostile tender offer for all of Richardson-Vicks’ shares. Unilever conditioned the $56 price on the approval of a merger by Richardson-Vicks’ board of directors. Without the board’s cooperation, the offering price was $48 per share, Unilever said.
Richardson-Vicks’ response Tuesday was an outright rejection of Unilever’s second offer as “not in the best interest of its shareholders.” It was the same response it gave in rebuffing the first offer on Sept. 10.
John S. Scott, president and chief executive of the Wilton-based company--whose products include Nyquil cold suppressant and Vicks Vaporub--said Unilever was trying to pressure Richardson-Vicks’ board into a deal.
“We will not be coerced by this tactic into taking action dictated by Unilever’s interests and not those of our shareholders,” Scott said.
Richardson-Vicks’ board also urged stockholders not to tender their shares to Unilever, saying that the potential $48-per-share purchase price was “less than present market price.” The company’s stock closed Tuesday at $50.125 a share on the New York Stock Exchange, down $1.125 a share from Monday’s close.
Unilever had no immediate comment on the latest action by Richardson-Vicks.
After rejecting Unilever’s first offer, both Richardson-Vicks and the Richardson family--which is descended from Lunsford Richardson, who founded its precursor, Vicks Family Remedies Co., in Greensboro, N.C., in 1907--announced plans to buy back a significant amount of the company’s stock.
Richardson-Vicks said Tuesday that it has purchased 2.5 million shares, or about 11%, of its stock. The company’s announced goal was 5 million shares, or 22%.
Bennetts said she did not know how many shares the family had purchased since Unilever’s first proposal.
The Richardson family, which analysts have described as extremely tight knit, owns more than 7.3 million, or about 32%, of the company’s estimated 20.5 million outstanding shares. Richardson-Vicks had about 23.4 million shares outstanding on April 30, which would make Unilever’s offer worth as much as $1.31 billion.
Unilever said that fees, expenses and the exercise of options convertible into Richardson-Vicks stock would boost the cost of the takeover to as much as $1.35 billion.
